2015-11-13T16:04:12-06:00 2014-12-31 350921680 CROWE HORWATH LLP 9600 Brownsboro Road Suite 400 Louisville KY 402411122 990 2014-01-01 611028724 NORTON PROPERTIES INC NORT 5026298263 ACCOUNTING 224 E BROADWAY 5TH FLOOR LOUISVILLE KY 40202 MICHAEL W GOUGH TREASURER 2015-11-13 true Rachel Spurlock P00520729 5023263996 2014 2016-03-07 17:11:31Z STEPHEN A WILLIAMS ACCOUNTING 224 E BROADWAY 5TH FLOOR LOUISVILLE KY 40202 32603551 false X WWW.NORTONHEALTHCARE.COM X 1981 KY OWNS MEDICAL OFFICE BUILDINGS AND PARKING GARAGES. 20 19 45 6 0 0 53183 0 29058116 32600197 -32257 -9500 3296 3354 29082338 32594051 0 0 0 0 905406 920892 0 0 0 30767951 35479488 31673357 36400380 -2591019 -3806329 64773193 74215193 55271003 68519332 9502190 5695861 NORTON PROPERTIES, INC. (PROPERTIES) HOLDS PROPERTIES THAT ARE USED TO SUPPORT THE CHARITABLE HEALTH CARE PURPOSES OF NORTON HEALTHCARE, INC. (NORTON), I.E. PRIMARILY OF NORTON HOSPITALS, INC. (NHI), COMMUNITY MEDICAL ASSOCIATES, INC., AND NORTON. PROPERTIES OWNS MEDICAL OFFICE BUILDINGS THAT ARE LEASED BY PHYSICIANS ON THE MEDICAL STAFF OF NHI. IT ALSO LEASES OFFICE SPACE AND PARKING FACILITIES FOR THE CONVENIENCE OF NORTON EMPLOYEES, PHYSICIANS ON THE MEDICAL STAFF OF NHI, AND GUESTS. false false 36078008 32603551 BUILDING AND PARKING RENTAL- MAINTAIN OFFICE AND PARKING FACILITIES NEAR THE NORTON HEALTHCARE, INC. HOSPITALS AND COMMUNITY MEDICAL ASSOCIATES, INC. PRACTICE LOCATIONS FOR USE BY PHYSICIANS, PATIENTS, PATIENTS' FAMILIES AND GUESTS, AND HOSPITAL EMPLOYEES. 36078008 true false false false false false false false false true false false false true false false true false false false false false false false false false false false true false false false false false false false false false false false false false true false false false true 97 0 true 45 true false false false false false false false false false X 20 19 false false false false true true true true true false false true true true true true true true true false X Helena Schulz 5026298263 Accounting 224 E BROADWAY 5TH FL LOUISVILLE KY 402022025 Stephen A Williams CEO/Trustee 2.00 48.00 X X 0 2420171 75417 Maria Gerwing Hampton Chair 0.50 12.00 X 0 1600 0 Donald H Robinson Vice Chair 0.50 8.00 X 0 0 0 Maria L Bouvette Trustee 0.50 3.00 X 0 1600 0 Craig D Grant Trustee 0.50 4.00 X 0 1600 0 Kevin J Hable Trustee (partial year) 0.50 3.00 X 0 0 0 Louis S Heuser MD Trustee 0.50 3.00 X 0 1600 0 Martha K Heyburn MD Trustee 0.50 5.00 X 0 1600 0 Richard R Ivey Trustee 0.50 3.00 X 0 1600 0 Ronald Lehocky MD Trustee 0.50 5.00 X 0 1500 0 Gail Lyttle Trustee 0.50 3.00 X 0 1600 0 James L Sublett MD Trustee 0.50 3.00 X 0 1600 0 Gregory E Mayes Trustee 0.50 7.00 X 0 1600 0 Joseph J McGowan EdD Trustee 0.50 3.00 X 0 1600 0 Mitch Nichols Trustee (partial year) 0.50 3.00 X 0 0 0 Edie Nixon Trustee 0.50 4.00 X 0 1600 0 Erwin Roberts Trustee 0.50 3.00 X 0 1600 0 Wendell P Wright Trustee 0.50 3.00 X 0 0 0 G Hunt Rousavall Jr Trustee 0.50 6.00 X 0 1600 0 Rev William J Schultz Trustee 0.50 5.00 X 0 1600 0 Gary L Stewart Trustee 0.50 5.00 X 0 1600 0 Richard S Wolf MD Honorary Chair Emeritus 0.50 4.00 X 0 1600 0 Russell F Cox President 2.00 48.00 X 0 2044775 688232 Michael W Gough Sys Sr VP CFO/Treasurer 2.00 48.00 X 0 1672339 537437 Robert B Azar Sys VP Chief Legal Officer/Secretary 2.00 48.00 X 0 573603 101815 Charles Mattingly Director of Properties 40.00 0 X 119810 0 24945 119810 6737988 1427846 1 false true false MESSER CONSTRUCTION CO 5158 FISHWICK DR CINCINNATI OH 452162216 CONSTRUCTION 5109173 INTEC BUILDING SERVICES INC 3812 BARDSTOWN RD LOUISVILLE KY 40218 CLEANING SERVICES 382275 RESCH CONSTRUCTION INC 4025 WOODSTONE DR FLOYDS KNOB IN 47119 CONSTRUCTION 301957 MEDICAL CENTER STEAM & CHILLED 1400 STORY AVE LOUISVILLE KY 40206 UTILITY-NON PUBLIC 236659 RIVERSIDE PARKING INC 927 WEST MAIN ST LOUISVILLE KY 40202 PARKING ATTENDANTS 236512 10 0 RENTAL INCOME 531310 32258871 32258871 PARKING INCOME 812930 341326 341326 0 0 0 0 32600197 0 0 9500 0 -9500 -9500 -9500 MISCELLANEOUS INCOME 531390 3354 3354 0 0 0 0 3354 32594051 32603551 0 -9500 464877 371425 93452 95440 76254 19186 241547 218309 23238 119028 103685 15343 4056 4056 967130 967112 18 0 96705 80672 16033 24786920 24786307 613 2903648 2903648 5295310 5295310 86009 86009 REPAIRS AND MAINTENANCE 866212 778420 87792 ALLOCATED SUPPORT 389148 326884 62264 COURIER EXPENSES 23055 23055 61295 60918 377 0 36400380 36078008 322372 0 0 0 1166848 1348304 121197150 48330261 63606345 72866889 0 0 0 0 64773193 74215193 1454523 1430140 0 53816480 67089192 55271003 68519332 X 9449007 5642678 53183 53183 9502190 5695861 64773193 74215193 -3806329 0 X false true X true true true X X 1 NORTON HOSPITALS INC 610703799 3 true 36078008 0 1 36078008 true false false false false false false false false false false false false false false true false 5768777 5768777 89598847 36157446 53441401 12945958 11391170 1554788 12883568 781645 12101923 72866889 CAPITALIZED LEASE AGREEMENT 44705385 PAYABLE TO AFFILIATE 17743760 ASSET RETIREMENT OBLIGATION 3590047 DEFERRED PURCHASE PRICE 1050000 67089192 X X true true false true false false false false false true false Stephen A Williams CEO/Trustee 0 989121 0 610652 0 820398 0 49230 0 26187 0 2495588 0 33712 Russell F Cox President 0 734932 0 294652 0 1015192 0 660580 0 27652 0 2733007 0 680800 Michael W Gough Sys Sr VP CFO/Treasurer 0 601043 0 241007 0 830288 0 509438 0 28000 0 2209776 0 572344 Robert B Azar Sys VP Chief Legal Officer/Secretary 0 379701 0 155734 0 38168 0 90853 0 10962 0 675418 0 0 Schedule J, Part I, Line 1a Tax indemnification and gross-up payments TAX INDEMNIFICATION AND GROSS-UP PAYMENTS ARE TREATED AS TAXABLE COMPENSATION TO THE INTERESTED PERSON LISTED BELOW AT TIME OF PAYMENT. PAYMENTS ARE IN ACCORDANCE WITH EXISTING COMPENSATION POLICY. GROSS-UP PAYMENTS SHALL BE MADE ONLY WHEN SPECIFIED IN AN EMPLOYEE'S EMPLOYMENT CONTRACT, OR AS APPROVED IN WRITING BY THE PRESIDENT AND CEO OF NORTON HEALTHCARE, EXECUTIVE VICE PRESIDENT OR CFO. DURING 2014, GROSS-UP PAYMENTS WERE PROCESSED AS OUTLINED IN THE EMPLOYMENT CONTRACT FOR THE CEO. SEE NARRATIVE PROVIDED IN SCHEDULE O, REFERENCING PART VI, LINE 15, WHICH DESCRIBES THE PROCESS FOR DETERMINING COMPENSATION FOR THE CEO, OFFICERS AND KEY EMPLOYEES OF THE ORGANIZATION. ANNUITY - THE ANNUITY REPRESENT ACCENTUATED RETIREMENT BENEFITS EARNED RELATED TO A NON-QUALIFIED DEFINED BENEFIT PENSION RESTORATION PLAN IN EFFECT SINCE 1990. CONTRIBUTIONS TO THIS PLAN HAVE BEEN MADE EACH YEAR, BEGINNING IN 2005. THE TOTAL VALUE OF THIS YEAR'S BENEFIT IS $557,876 OF WHICH $242,899 WAS A GROSS-UP PAYMENT TO COVER THE APPLICABLE TAXES and $314,977 WAS USED TO PURCHASE THE ANNUITY. THE FULL VALUE OF THIS YEAR'S BENEFIT WAS INCLUDED IN 2014 TAXABLE COMPENSATION of Mr. Williams. DISABILITY COVERAGE (AND ASSOCIATED GROSS-UP) FOR MR. WILLIAMS - DURING 2014 NET DISABILITY COVERAGE PREMIUMS TOTALED $30,921, AND THE ASSOCIATED GROSS-UP OF SUCH PREMIUMS TOTALED $16,504. THUS, THE TOTAL OF THESE AMOUNTS - $47,425 - WAS INCLUDED IN THE TAXABLE COMPENSATION OF MR. WILLIAMS IN 2014. Schedule J, Part I, Line 1a Discretionary spending account DISCRETIONARY SPENDING ACCOUNTS ARE TREATED AS TAXABLE COMPENSATION. THE ORGANIZATION PROVIDES A DISCRETIONARY SPENDING ACCOUNT FOR ELIGIBLE NORTON HEALTHCARE, INC. (NORTON) EXECUTIVES, EFFECTIVE OCTOBER 1, 2007. NORTON PROVIDES BENEFITS TO ITS IDENTIFIED EXECUTIVE STAFF TO PROVIDE A TOTAL COMPENSATION PACKAGE THAT IS COMPETITIVE WITH THE MARKET AND WHICH CONFORMS TO THE PHILOSOPHY AND GUIDELINES SET OUT BY THE BOARD OF TRUSTEES, THROUGH THE EXECUTIVE COMPENSATION PHILOSOPHY AND PROGRAMS. THROUGH THE DISCRETIONARY SPENDING ACCOUNT POLICY, EXECUTIVES ARE FREE TO CHOOSE WHATEVER BENEFITS THEY FIND MOST USEFUL OR IMPORTANT TO THEM AND NORTON DOES NOT REIMBURSE FOR THE COST OF THOSE BENEFITS, AS THEY ARE PART OF THE DISCRETIONARY SPENDING ACCOUNT. THE INTERESTED PERSONS LISTED BELOW RECEIVED THE BENEFIT OF A DISCRETIONARY SPENDING ACCOUNT IN 2014: Stephen A. Williams - $32,427 Russell F. Cox - 59,434 Michael G. Gough - 52,208 Robert B. Azar - 17,500 Schedule J, Part I, Line 3 Arrangement used to establish the top management official's compensation NORTON HEALTHCARE, INC. (NORTON) EIN 61-1028725 IS THE PARENT ORGANIZATION FOR NORTON PROPERTIES, INC. AND THEREFORE ESTABLISHES COMPENSATION FOR THE CEO, OFFICERS AND KEY EMPLOYEES THROUGH ENGAGING WITH THE EXECUTIVE COMMITTEE OF NORTON; AN INDEPENDENT COMPENSATION CONSULTANT; WRITTEN EMPLOYMENT AGREEMENTS; THIRD PARTY COMPENSATION SURVEYS AND APPROVAL BY THE EXECUTIVE COMMITTEE AND BOARD. SEE NARRATIVE IN SCHEDULE O, REFERENCING PART VI, LINE 15 WHICH FURTHER DESCRIBES THE PROCESS FOR DETERMINING COMPENSATION FOR THE ORGANIZATION. Schedule J, Part I, Line 4b Supplemental nonqualified retirement plan THE FOLLOWING INTERESTED PERSONS PARTICIPATED IN OR RECEIVED PAYMENT FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS AS DESCRIBED IN IRC SECTION 457(F). THE INTERESTED PERSONS BELOW MAY HAVE PARTICIPATED IN ONE OR MORE OF THE FOLLOWING PLANS: THE EXECU-FLEX BENEFIT PLAN, THE EXECU-PLUS BENEFIT PLAN, DEFINED BENEFIT AND DEFINED CONTRIBUTION RESTORATION PLANS, AND THE PHYSICIAN DEFERRED PLAN. THE "PAY CREDIT" OUTLINED BELOW REPRESENTS A REASONABLE ESTIMATE OF THE ANNUAL INCREASE IN ACTUARIAL VALUE OF THE PLANS; AND THEREFORE, REPRESENTS THE ORGANIZATION'S CONTRIBUTION TO THE VALUE OF THE BENEFITS. NAME - PAY CREDIT Stephen A. Williams - $ 35,455 Russell F. Cox - 636,564 Michael W. Gough - 486,726 Robert Azar - 74,606 THE "PAYMENT RECEIVED" OUTLINED BELOW REPRESENTS CASH PAYMENTS THAT THE EMPLOYEE RECEIVED DURING 2014 AND CAN BE COMPRISED OF CURRENT AND OR PRIOR YEARS EMPLOYEE AND EMPLOYER CONTRIBUTIONS. NAME - PAYMENT RECEIVED Stephen A. Williams - $ 140,077 Russell F. Cox - 891,748 Michael W. Gough - 722,763 Schedule J, Part I, Line 7 Non-fixed payments In 2014, Norton Healthcare, Inc. (Norton) had in place a Variable Compensation Plan for Executives, eligibility under which extended to employees holding a full-time position as Senior Officer, Officer, System Director or other designated Director level position. Under the plan, a variable compensation pool amount is approved by the Board of Trustees. Each participant's performance is evaluated relative to the goals and objectives documented as part of the participant's plan; and an award is determined for the participant, based on achievement of the goals and objectives, subject to the funding of the variable compensation pool. At the end of each year, the Committee on Executive Compensation and Benefits determines an appropriate award for the Norton's President & Chief Executive Officer, and the President & Chief Executive Officer recommends appropriate awards for other senior executives to the Committee on Executive Compensation and Benefits for its review and approval. Form 990, Part V, Line 2a EMPLOYEES REPORTED ON FORM W-3 NORTON HEALTHCARE, INC. (NORTON) EIN 61-1028725 IS THE COMMON PAYING AGENT FOR NORTON PROPERTIES, INC. (PROPERTIES) AND THEREFORE, ALL APPLICABLE IRS TAX COMPLIANCE FILINGS ARE REPORTED BY NORTON ON BEHALF OF PROPERTIES. PROPERTIES HAS APPROXIMATELY 45 EMPLOYEES. Form 990, Part V, Line 1a VENDORS REPORTED ON FORM 1096 NORTON HEALTHCARE, INC. (NORTON) EIN 61-1028725 IS THE COMMON PAYING AGENT FOR NORTON PROPERTIES, INC. (PROPERTIES) AND THEREFORE, ALL VENDORS, INCLUDING INDEPENDENT CONTRACTORS, ARE PAID AND REPORTED BY NORTON ON BEHALF OF PROPERTIES FOR PURPOSES OF PART V, LINE 1. THE NUMBER OF 1099S REPORTED AND FILED FOR 2014 BY NORTON FOR PROPERTIES, WAS APPROXIMATELY 97. PROPERTIES HAS APPROXIMATELY 10 INDEPENDENT CONTRACTORS EXCEEDED $100,000 FOR 2014. Form 990, Part VI, Line 1a Delegate broad authority to a committee The Executive Committee shall possess and may exercise all the powers and authority of the Board of Trustees in the management and direction of the business and affairs of the Corporation. However, the Executive Committee does not possess the authority to do the following: a ) fill vacancies on the Board; b) change the membership of the Executive Committee; c) make decisions to merge, liquidate, or otherwise make decisions outside of the normal course of business; d) make final determinations of long-term policy; e) hire or fire the Chief Executive Officer; and f) amend the Articles of Incorporation or Bylaws. Form 990, Part VI, Line 6 Classes of members or stockholders NORTON HEALTHCARE, INC. EIN 61-1028725 IS THE SOLE MEMBER OF NORTON PROPERTIES, INC. Form 990, Part VI, Line 7a Members or stockholders electing members of governing body THE BOARD OF TRUSTEES OF NORTON HEALTHCARE, INC. APPOINTS THE TRUSTEES OF THE ORGANIZATION. Form 990, Part VI, Line 7b Decisions requiring approval by members or stockholders ACCORDING TO THE ARTICLES OF INCORPORATION OF THE ORGANIZATION, NORTON HEALTHCARE, INC. (NORTON), THE SOLE MEMBER, POSSESSES ALL OF THE RIGHTS GRANTED TO A MEMBER PURSUANT TO LAW, INCLUDING THE RIGHT TO ELECT TRUSTEES OR DIRECTORS AND APPROVE AMENDMENTS TO THE ARTICLES OF INCORPORATION OF THE ORGANIZATION. NORTON ALSO POSSESSES THE RIGHT TO REQUIRE THE ORGANIZATION TO (I) PROVIDE CONTRIBUTIONS OF FUNDS OF THE ORGANIZATION TO PAY ALL OR A PORTION OF THE PRINCIPAL OF, INTEREST ON, AND ALL OTHER PAYMENTS TO BECOME DUE AND OWING WITH RESPECT TO ANY AND ALL INDEBTEDNESS INCURRED BY NORTON, AND (II) PROVIDE SECURITY FOR SUCH INDEBTEDNESS. Form 990, Part VI, Line 11b Review of form 990 by governing body AT THE OCTOBER 8, 2015 FINANCE COMMITTEE MEETING OF NORTON HEALTHCARE, INC. (NORTON), THE 990S WERE DISCUSSED AND COMMITTEE MEMBERS HAD AN OPPORTUNITY TO ASK QUESTIONS. COINCIDING WITH THE FINANCE COMMITTEE MEETING, ELECTRONIC COPIES OF THE 990S WERE MADE AVAILABLE TO ALL MEMBERS OF THE FINANCE COMMITTEE AND BOARD OF TRUSTEES THROUGH THE DIRECTOR'S PORTAL SITE. NORTON IS THE PARENT OF COMMUNITY MEDICAL ASSOCIATES, INC., NORTON HOSPITALS, INC., NORTON PROPERTIES, INC., NORTON HEALTHCARE FOUNDATION, INC., AND THE CHILDREN'S HOSPITAL FOUNDATION, INC. Form 990, Part VI, Line 12c Conflict of interest policy THE ORGANIZATION REGULARLY AND CONSISTENTLY MONITERS AND ENFORCES COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY BY ANNUALLY DISTRIBUTING A QUESTIONNAIRE THAT REQUIRES OFFICERS, TRUSTEES, AND KEY EMPLOYEES TO DISCLOSE INTERESTS THAT MAY GIVE RISE TO CONFLICTS. IF A CONFLICT ARISES, THE POLICY PROVIDES PROCEDURES FOR ADDRESSING CONFLICTS TO ENSURE DECISIONS ARE MADE IN THE BEST INTEREST OF THE ORGANIZATION. Form 990, Part VI, Line 15a Process to establish compensation of top management official See Narrative below for Line 15b. Form 990, Part VI, Line 15b Process to establish compensation of other employees The organization takes all necessary steps to ensure that compensation for all officers, directors and key employees is reasonable and appropriate for the services provided to the organization. The organization provides a total compensation package that is on par with compensation provided by similar organizations and which conforms to the policies and guidelines set out by the Board of Trustees. Norton Healthcare, Inc. (Norton) engages an outside independent compensation consultant, Integrated Healthcare Strategies (IHS), to provide comparability data for Norton's officers and key employees on total compensation for similar positions at health systems and hospital organizations similar in size, scope of services, and circumstances. In addition, the organization participates in third party surveys which provide aggregate, comparative compensation data for officers and key employees in similar positions at similar organizations. IHS consultants presented and discussed this comparability data in 2013 for the 2014 compensation review and met in 2014 for the 2015 compensation review with the committee of board leadership (now Executive Committee) of the Board of Trustees (Board) The Committee reviewed the executive compensation and benefits program, determined total compensation for the CEO, and approved compensation for other officers and key employees. The Committee reviewed Norton's variable compensation program and determined appropriate awards for performance relative to goals set for the year. After the Committee determined appropriate compensation and benefits for officers and key employees, the Board approved their total compensation. Employment contracts for the CEO, COO, and CFO and key employees are signed, and reviewed as necessary. Form 990, Part VI, Line 19 Required documents available to the public FINANCIAL STATEMENTS, GOVERNING DOCUMENTS, AND CONFLICTS OF INTEREST POLICIES ARE NOT REQUIRED DISCLOSURES PURSUANT TO INTERNAL REVENUE CODE (IRC) SECTION 6104. THESE DOCUMENTS ARE NOT AVAILABLE TO THE PUBLIC. Form 990, Part VII, Section A, Line 1a, Column (E) Board Member Stipend Payments Norton Healthcare, Inc. (Norton) and affiliates (Norton Hospitals, Inc., Community Medical Associates, Inc., Norton Properties, Inc., Norton Healthcare Foundation, Inc., and The Children's Hospital Foundation, Inc.) encourages and facilitates board member attendance at educational programs and conferences on subjects relevant to Norton. Norton's travel policy for Board of Trustees provides that for each trustee that attends at least one out of town educational conference, a lump sum stipend will be paid to cover unreimbursed travel expense and other miscellaneous expenses associated with conference preparation, attendance or follow up. In compliance with IRS regulations, Norton provides a form 1099 to any trustee that receives a stipend. These amounts have been reported in Part VII of the form 990 as reportable compensation to the trustee receiving stipends in 2014. Form 990, Part XII, Line 3b A-133 AUDITS PART XII LINES 3A AND 3B AS REQUIRED BY THE U.S. OFFICE OF MANAGEMENT AND BUDGET CIRCULAR A-133, AUDITS OF STATES, LOCAL GOVERNMENTS, AND NON-PROFITS ORGANIZATIONS, IN 2014 NORTON HEALTHCARE, INC. AND AFFILIATES (NORTON HOSPITALS, INC., COMMUNITY MEDICAL ASSOCIATES, INC., NORTON ENTERPRISES, INC., NORTON HEALTHCARE FOUNDATION, INC., NORTON PROPERTIES, INC., AND THE CHILDREN'S HOSPITAL FOUNDATION) RECEIVED AN AUDIT IN ACCORDANCE WITH SINGLE AUDIT ACT. NORTON HEALTHCARE INC ACCOUNTING 224 E BROADWAY 5TH FLOOR LOUISVILLE KY 40202 611028725 PROVIDE ADMINISTRATIVE AND SUPPORT SERVICES KY 501(c)(3 Type II NA false NORTON HOSPITALS INC ACCOUNTING 224 E BROADWAY 5TH FLOOR LOUISVILLE KY 40202 610703799 PROVIDE HOSPITAL SERVICES KY 501(c)(3 3 NORTON HEALTHCARE INC false COMMUNITY MEDICAL ASSOCIATES INC ACCOUNTING 224 E BROADWAY 5TH FLOOR LOUISVILLE KY 40202 611276316 OPERATES A NETWORK OF PHYSICIAN PRACTICES KY 501(c)(3 9 NORTON HEALTHCARE INC false THE CHILDREN'S HOSPITAL FOUNDATION INC ACCOUNTING 224 E BROADWAY 5TH FLOOR LOUISVILLE KY 40202 616027530 GENERATE FUNDS TO SUPPORT PROGRAMS AND SERVICES KY 501(c)(3 7 NORTON HEALTHCARE INC false NORTON HEALTHCARE FOUNDATION INC ACCOUNTING 224 E BROADWAY 5TH FLOOR LOUISVILLE KY 40202 310914919 GENERATE FUNDS TO SUPPORT PROGRAMS AND SERVICES KY 501(c)(3 7 NORTON HEALTHCARE INC false false false true false false false false false false true false false false false true false false true true